Supply chains resilience: Experts recommend diversifying energy sources, attracting critical investment and bolstering international cooperation

On 28 November, DIGITALEUROPE brought together Secretaries of State and other senior officials from Latvia, Ireland, Poland, Spain, and Sweden, C-level industrial executives and senior EU Commission officials to discuss the future of EU resilience in supply chains.

The discussion looked at three key topics including:

• The impact of the ongoing energy crisis on manufacturing capacities across the EU
• Possible solutions to improve the overall business framework conditions for production in Europe
• The critical importance of strengthening international cooperation especially on chips and raw materials

The current energy crisis is fueling exploding operational cost across Europe that have increased by 200-300% in some strategic sectors. This poses a significant threat to the EU’s global competitiveness as the manufacturing cost gap is sharply widening with other regions. Experts recommended an urgent diversification of energy sources and a speedy investment in renewables to keep prices under control.

Ramping up business investment is also crucial to Europe’s supply chain resilience on the long run but attracting investors would require some drastic changes to the way business can be conducted in Europe. For example, heavy administrative procedures are considered a significant barrier especially when it comes to granting permits for setting up production plants. Experts highlighted how the EU Chips Act has the potential to attract investments by fast-track permitting processes to build chip facilities. Obtaining environmental permits for chip fabrication plants in the EU can take up to an excessively long period of 12 months.

Regarding attracting talent, experts noted that chips represent a compelling case for industry, public sector and educators to co-design tailored university programmes for critical chip-related skills. They should also ensure reskilling of existing workers to sustain high chip demand.

The roundtable has also concluded that international cooperation is vital to securing Europe’s long-term supply chain resilience.  Chips and raw materials are two examples of global-by-nature industries. The EU-US Technology and Trade Council, for example, offers the opportunity to align on public support measures to keep up with high expected demand on chips.